IT Helped Manufacturers Boost Margins In 2004

Manufacturing companies that deployed technology to improve their supply chains and other business processes showed the greatest gains in sales, according to a research report coming out next week.

Manufacturers that aggressively deployed technology to improve operations showed greater gains than companies that didn't, according to research firm Manufacturing Insights, which plans to publish a report card next week that ranks the performance of 240 domestic and foreign manufacturers in nine separate industries.

While all of the industries, including aerospace and defense, automotive, base materials, general discrete manufacturing, high tech, and others, realized increased revenue, some segments shined brighter than others. Aerospace and defense, high tech, and wholesale manufacturers had the greatest year-over-year revenue growth in 2004, the report says. The automotive and retail trade segments saw below-average revenue growth.

Bob Parker, VP of research, says the general economic upturn in 2004 "lifted all boats" in manufacturing, but it was companies that "aggressively used technology such as supply chain and up-front product-life-cycle tools" that showed the greatest increase in net profit margins. The biggest gains were seen in automotive, diversified manufacturing, high tech, base materials, and consumer goods.

"Manufacturers have been aggressive investors in IT as well as improving their manufacturing and business processes," says Parker. "This puts them in a position to scale and increase net profit."

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